Progressive 2015 Annual Report Download - page 27

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The following tables provide a summary of changes in fair value associated with Level 3 assets for the years ended
December 31, 2015 and 2014:
Level 3 Fair Value
(millions)
Fair Value
at Dec. 31,
2014
Calls/
Maturities/
Paydowns Purchases Sales
Net Realized
(Gain)/Loss
on Sales
Change in
Valuation
Net
Transfers
In (Out)
Fair Value
at Dec. 31,
2015
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed $ 0 $ 0 $0 $0 $ 0 $ 0 $ 0 $ 0
Commercial mortgage-backed 11.6 (1.3) 0 0 0 (0.4) 0 9.9
Total fixed maturities 11.6 (1.3) 0 0 0 (0.4) 0 9.9
Equity securities:
Nonredeemable preferred stocks:
Financials169.3 0 0 0 (39.4) (1.4) (28.5) 0
Common equities:
Other risk investments 0.4 0 0 0 0 (0.1) 0 0.3
Total Level 3 securities $81.3 $(1.3) $0 $0 $(39.4) $(1.9) $(28.5) $10.2
1The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in
ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first
six months of 2015.
Level 3 Fair Value
(millions)
Fair Value
at Dec. 31,
2013
Calls/
Maturities/
Paydowns Purchases Sales
Net Realized
(Gain)/Loss
on Sales
Change in
Valuation
Net
Transfers
In (Out)1
Fair Value
at Dec. 31,
2014
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed $ 0.2 $ 0 $0 $(0.1) $0.1 $ (0.2) $ 0 $ 0
Commercial mortgage-backed 29.0 (3.6) 0 0 0 (0.2) (13.6) 11.6
Total fixed maturities 29.2 (3.6) 0 (0.1) 0.1 (0.4) (13.6) 11.6
Equity securities:
Nonredeemable preferred stocks:
Financials239.0 0 0 0 0 30.3 0 69.3
Common equities:
Other risk investments 0.5 (0.1) 0 0 0 0 0 0.4
Total Level 3 securities $68.7 $(3.7) $0 $(0.1) $0.1 $29.9 $(13.6) $81.3
1The $13.6 million was transferred out of Level 3 and into Level 2 due to an improvement in the security’s underlying collateral and an increase in
liquidity and market activity in comparable securities.
2The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in
the comprehensive income statement.
App.-A-26